The centrepiece of Canada’s innovation strategy is the $950-million “supercluster” initiative. The goal, according to the federal government, is for companies of all sizes, academia and the non-profit sector to collaborate on new technologies, to spur economic growth and create jobs. As part of the Innovation Nation series, the Financial Post is taking an in-depth look at each of the five regional projects, and provide continuing coverage of their progress. You can find all of our coverage here.

Drugs tailored to a person’s genetics don’t appear to have a lot in common with airplane assembly line simulations or smart devices that monitor tree cutting in remote forests.

But all three technologies are among the first to get funding from British Columbia’s digital technology supercluster, one of five innovation hubs the federal government is investing $950 million in over five years in hopes of spawning world-leading technologies and companies.

Innovation, Science and Economic Development granted the B.C. hub $153 million, with 29 members pitching in another $200 million. An additional 500 organizations including non-profits have signed on as associates without making a financial commitment.

The West Coast cluster is an amalgamation of post-secondary institutions and large and small businesses from sectors including health care, mining, forestry and aerospace.

What unites these disparate players is big data and, more critically, a need to analyze the huge volumes of information being collected. Some say the ability to analyze this data could become the currency that fuels every element of the economy, much like oil was the currency of the last century.

“Just like oil coming out of the ground is not a very useful resource, data that’s swirling around in big pools is not a very useful resource,” Sue Paish, chief executive of the digital technology supercluster, said. “But if you can actually extract the data that you need, analyze it, refine it, leverage it, deploy it, monetize it, it becomes an incredibly powerful part of society.”

Paish knows she’s not the first to make the analogy between oil and data, a comparison often drawn by major tech executives despite the former’s finite nature and the seeming limitlessness of the latter, but she believes the digital technology supercluster can unlock big data’s potential.

The cluster formed after the federal government announced its supercluster funding plan in the 2016 budget. It anticipated a regional distribution of money, Paish said, and wanted to have a strong proposal for B.C.

Realizing that the province has a depth of digital knowledge in sectors ranging from entertainment and gaming to health care and resource extraction, Paish said the group decided to focus on “harnessing the power of the data that’s being created, but not leveraged.”

Only 0.8 per cent of all data collected is ever analyzed, according to a 2018 white paper by research firm IDC. That amount is expected to go up to one per cent by 2020, IDC senior vice-president John Gantz said in an email.

But that still leaves an almost unfathomable amount of untouched data, since the overall amount of data collected is expected to hit 175 zettabytes (one ZB is a trillion gigabytes) in 2025 from 33 ZB in 2018, according to IDC estimates. (One zettabyte is enough data to stream one trillion movies.)

Paish said there’s a competitive advantage to be had for the first jurisdiction that becomes known for successfully analyzing big data. Collaborating across industries is expected to help B.C.’s supercluster do just that.

“The best innovation and the best deployments of innovation come from different perspectives coming together around a table,” she said. “It’s harder to come to a final product or a final plan, but that final plan is richer.”

More specifically, the digital technology supercluster intends to develop data visualization tools such as mapping and virtual reality; data analysis tools like cloud and quantum computing; and data collection tools such as the Internet of Things and data repositories. It will apply these tools in the precision health, natural resources and industrial sectors.

Over the next five to 10 years, the supercluster hopes the projects it funds will create 13,000 jobs and increase Canada’s gross domestic product by $5 billion.

One of the supercluster’s major players is Telus Corp. The telecom, which has a health division that serves 22,000 physicians and 6,300 pharmacies, is involved in a pharmacogenomics project that is studying how genetics affect a person’s reaction to different drugs. Other partners in the project include GenXys Health Care Systems Inc., LifeLabs BC LP and Genome B.C.

The supercluster’s mix of big and smaller companies is important, because it gives large organizations a chance to focus on new ideas around the common theme of data, said Ohad Arazi, Telus Health’s chief strategy officer, while also giving smaller players the ability to strike deals that could help commercialize their research.

“The reality is that innovation is very difficult for big companies,” he said. “They have to continue delivering value; it’s hard to step back and pursue innovative ideas.”

Arazi sees the supercluster as an opportunity for B.C. players to band together and develop global ambitions, a goal echoed by other members including the University of British Columbia.

“This is a really exciting opportunity for post-secondary and industry to come together to build disruptive technology to really help make sure Canada is at the lead creating the knowledge economy,” said Gail Murphy, UBC’s vice-president of research and innovation.

UBC is participating in a digital twin project, which is creating a simulation of two complex industrial production lines used to make Boeing Co. aircraft parts. This “learning factory” will enable Boeing and partners — including AMPD Game Technologies Ltd., a Vancouver-based video-game company; Avcorp Industries Inc., an aircraft supply chain company in Delta, B.C.; and LlamaZOO, a Victoria-based 3D data visualization company — to test new factory processes in real time.

On top of the learning factory’s industry applications, Murphy said it can give students a chance to develop the talent and skills that companies are looking for. Projects such as these also show the value in sharing ideas and collaborating, something she said would be very hard to do without supercluster funding.

“It’s breaking down barriers,” she said. “Having Microsoft and Finger Food Studios at the same table as Canfor and TimberWest and Telus, that kind of cross-sectoral discussion, in my experience, doesn’t happen a lot in regular life.”

Collaboration across industries is part of what drew mining giant Teck Resources Ltd. and space robotics company MDA Corp. to the supercluster. Both have pledged funding, although neither is participating in one of the initial projects.

“We see there being tremendous opportunity,” said Victoria Sterritt, Teck’s lead of technology and innovation.

Teck already uses data extensively, such as getting information from X-ray sensors on its shovels to distinguish between ore and waste, and from remotely operated bulldozers, which use automation to extract coal from otherwise unstable areas of a pit.

Industries can be fairly insular, Sterritt said, but Teck sees an opportunity to share knowledge across sectors rather than talk only to other miners.

“We understand we just can’t get to as good of a result on our own,” she said.

Chris Pogue, president of MDA Government and a veteran of the Canadian Air Force, agreed that having variety around the table is more effective, even if it is messier.

“A certain amount of chaos is healthy, to be quite frank,” he said.

Given MDA’s line of work, it is well aware of the challenges of analyzing vast amounts of data. “We’ve been dealing with the big data problem as a space agency before anyone called it big data,” Pogue said. The company plans to work on virtual and augmented reality projects as part of the cluster.

Joining together to grapple challenges that companies such as MDA previously tackled alone is the crux of the strategy behind the supercluster since researchers believe in cross-pollinating ideas.

Catherine Beaudry, Canada Research Chair on the Creation, Development and the Commercialization of Innovation at Polytechnique Montréal, said innovation often results from combining knowledge pools that already exist.

“Mixing and matching from different sectors can be highly beneficial,” she said. “Learning from one another and not having to do everything from scratch within a silo, I think that’s very, very important.”

As an example, Beaudry pointed to the aerospace industry’s link to the gaming community through the use of technologies such as flight simulators.

As for the risks in collaborating, she said partners have to be careful with intellectual property management, but could potentially benefit from casting a wider geographical net beyond B.C.

“Our superclusters are very much seen as a Canadian experiment,” she said.

Of course, the idea of concentrating regional players to spark innovation isn’t new. It dates back to U.S. economist Michael Porter’s theories from the 1990s, but it has become a buzzword as politicians around the world strive to create their own Silicon Valleys.

Rune Dahl Fitjar, a professor at the University of Stavanger Business School in Norway who studies what types of interactions lead to innovation, said he has found very little evidence about the effectiveness of cluster policies, but said they continue to appeal to policy-makers trying to stimulate industry development.

“It’s the need to appear to be doing something,” he said.

Fitjar said companies that look beyond a particular region to find international partners tend to find the most success.

“The wisest way to go is trying to improve diversity,” he said, adding that a multi-industry approach may help develop new ideas closer to home. “Going across sectors is helpful, because it then makes it easier to find emergent industries that can benefit and can also participate. It helps companies go beyond the networks they develop anyway.”

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